International Journal of Accounting and Taxation December 2016, Vol. 4, No. 2, pp. 98-119 ISSN: 2372-4978 (Print), 2372-4986 (Online) Copyright © The Author(s). All Rights Reserved. Published by American Research Institute for Policy Development DOI: 10.15640/ijat.v4n2a7 URL: https://doi.org/10.15640/ijat.v4n2a7

Accountability of Non-Government Organization from the Perspective of Theory

Anik Yuesti1, Luh Gde Novitasari2 & Ni Wayan Rustiarini3

Abstract

This study aims to see the of non-government organization from the perspective of Stakeholder theory. Accountability in its practice and theory has weaknesses. The weaknesses are lacking of supervision of disbursement and neglecting people’s culture (Dixon et al., 2006); lacking of information in organization (Kovach et al., 2003); financial statements that are submitted only to the donors (Goddard and Assad, 2006); and the many scandals and abuses of power in organizations (Gibelman and Gelman, 2001). However, this agency theory cannot be applied by NGOs because they are social organizations (Dixon, et al., 2006). Therefore, it is interesting to know the practices and the accountability of NGO. The researcher used interpretive existential phenomenology method to understand a phenomenon (Burrel dan Morgan, 1994; pp.243-247). Stakeholder theory is used to analyze problems with MBM organization activity assumption, which is related to the donors and community. The results of the research show that accountability based on stakeholder perspective theory is for all stakeholders. They are the owners, the management, and social. Stakeholder theory does not emphasize on vertical relationship or the relationship with God as the Owner.

Keywords: Accountability, stakeholder theory

1 Postgraduate program Mahasaraswati Denpasar University Magister Manajemen Indonesia [email protected] 2 Faculty of Economy Mahasaraswati Denpasar University Accounting Study Program Indonesia [email protected] 3 Faculty of Economy Mahasaraswati Denpasar University Accounting Study Program Indonesia [email protected]

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I. Introduction

Various criticisms in articles and media highlighting the accountability of non- governmental organization (NGO) are getting more intensified in respect to disbursement issues (Gibelman and Gelman, 2001; Goddard and Assad, 2006; Ebrahim, 2003; Brown and Moore, 2001; Kovach et al., 2003; Dixon et al., 2006; Gray et al., 2006; Unerman and O'Dwyer, 2006 a, b; Kaldor, 2003), more specifically to the rights and obligations of the organization (Lehman, 1999, 2005). The issues arise because the purpose of NGOs to help the community (the stakeholder) solve their problems seems to be weak in terms of its accountability (Fries, 2003; Brown dan Moore, 2001). “How should the accountability of NGOs be?” is still a difficult question to answer and still in debates (Ebrahim, 2003; Gray et al., 2006).

Weak accountability of NGOs can be seen from, for example, financial reports that are mostly submitted only to the donors (Ebrahim, 2003; Goddard and Assad, 2006), lacking of information about organization’s activities to the community (Kovach et al., 2003), and lacking of supervision of the disbursement that disregards the culture of community (Dixon et al., 2006). This happened apparently due to many scandals and abuses of power done by the NGOs (Gibelman and Gibelman, 2001).

Kovach et al. (2003) analyzed the accountability in three forms of organization, which are IGO (international governmental organization), TNC (transactional ), and NGO (non-governmental organization). His studies measured the accountability of organizations by using two approaches, namely the number of members and access to information. His study found that the members of the IGO has an insignificant role in policy making because there are only a few members involved in it while in the TNC the decision is made by the , and in the NGO decision is made by the members and the parties outside organization. Based on the measurement of access to information, the IGO organization is more transparent than the two other organizations. The information presented by IGO is related to the activities performed and all IGO organizations publish an annual report. In TNC, information presentation of policies and organization's operations are very minimal, except for the information about products.

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Terakhir, The last, NGO presents the most minimal information of the three forms of organization. NGOs present insufficient information about their activities. On-line information presented by NGOs about policy and decision making is mostly not transparent, and not all NGOs publish annual reports.

From these results it can be concluded that the weak accountability of NGOs to stakeholders is caused by poor (Gibelman and Gelman, 2001) and by leaning on the viewpoint of agency theory, not on the stakeholder theory because the reports are mostly submitted only to the donors. Factually, the responsibility of the NGOs is more to the stakeholder theory because NGO is a social organization (Brown and Moore, 2001; Ebrahim, 2003; Gray et al., 1997; Unerman and O'Dwyer, 2006a; O'Dwyer, 2005; Ibrahim 2007).

Based on agency theory (Jensen and Meckling, 1976) company is the media run by agent that is hired by principal to maximize profits. Different from stakeholder theory, agent hired by principal does not only have to be accountable to the principal (donor), but also to the communities that are involved (Atack, 1999; Kovach et al., 2003; Power, 1991; Goddard, 2004). This opinion is based on the desire of donors to maximize the welfare of the community through an agent, and the fact that organization and community have various forms of both beneficial and disadvantageous relationships that influence each other. This makes community has an important position with which it can claim against organization (Unerman and O'Dwyer, 2006; Driscoll and Stairk, 2004).

Agency theory and stakeholder theory derived from philosophical hedonism (Aristippos and Epikuros) and eudemonisme (Aris¬toteles) who is then proposed his deontology and neoclassical views. According to Aristippos "the thing that is truly good for human is pleasure", and having almost the view, Aristotle stated "the highest goal and the final meaningful thing of human life is happiness (eudaimonia) which can be achieved by carrying out its functions properly" (Bertens, 2007, pp. 235). Furthermore, the idea of stakeholder theory is based on the moral philosophy of deontology that involves various parties as part of economic activities and all participants bear all aspects of activities together making them collectively referred to as stakeholders (managers, employees, shareholders, creditors, customers, government, and society). All participants are contributors in creating added values resulting from the shared activities.

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In contrast to the agency theory, this theory is based on neoclassical moral philosophy that views the owner (proprietor) as the center of attention. Creditors, government, and the party or other entities are regarded as outer owners causing all the funds used by those parties (for example salaries, interests, and taxes) will be considered costs instead of profit sharing (Suwardjono, 2005; pp.501-502).

Regarding the facts stated above, the researcher is interested in analyzing the accountability of an NGO in Bali, Maha Bhoga Marga (MBM), based on stakeholder theory. As an NGO, the executor of a plan, not only does it have to be accountable to the donors but also to another stakeholder or the community involved both formally and morally. As it is known, this organization, which has branches in almost all regions in Bali, is focusing on environment and in its activities, this organization involves the community.

Maha Bhoga Marga is an NGO that has high organization values. This can be seen from its predicate as the best social institution in Indonesia in terms of community empowerment. This organization has a good relationship with government making it have a big opportunity to actively participate in the development of Indonesian people, particularly those living in Bali. The programs of this organization are annually funded by the donors. This NGO also funds its activities by itself annually. Through this research, the accountability of this institution based on stakeholder theory will be revealed.

Several previous articles and studies on NGO also gave the same conclusions stating that the accountability of NGOs is weak (Dixon et al., 2006; Goddard dan Assad, 2006; Gibelman and Gelman, 2001; Kovach et al., 2003; Fries, 2003; and Brown and Moore, 2001). Based on this conclusion, the problem of this study is “How is the form and accountability of NGOs seen from the perspective of stakeholder theory?” Since the accountability of NGOs is still referring to agency theory – the reports of their activities are submitted only to their donors – theoretical implications of this study can hopefully give new understanding to explain and revise the existing theory about the accountability concepts of NGOs to the donors and the community, which is based on stakeholder theory. Different from the approach of agency theory, the reports about the organization’s activities are not only submitted to the donors but also to the people involved.

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With this, it is expected that the results of this study can provide an understanding about the accountability which is based on stakeholder theory.

Ii. Literature Review

Accountability of NGO

Simply said, accountability is a process to explain one's actions to others. The actions committed should not only be accountable to himsef but also to the others. This means accountability has two key elements, namely; "Accounts and calculations of accounts" that involves donor and the recipient of account. The user is accountable it promises to do something that can be justified legally and morally. In the context of public service, accountability is defined as an obligation to provide explanations about activities and performance of the organization to those who need the information. This will be used as a control instrument to clarify the responsibility given (Salleh and Iqbal, 1995 pp. 6).

Any form of organization (not only the government) is factually influential to people’s life (stakeholders) and therefore, the understanding of the concept of "stakeholder accountability" is very useful for organizations. Since people are affected by the activities of organizations, they are eligible to claim explanations (either indirectly or indirectly) from organizations. This is called "stakeholder democracy control" mechanism. The people have a right to determine organization's activities and ensure the decisions made are in line with goals of organizations and stakeholders (O'Dwyer, 2004). This stakeholder democracy is a good governance system of an organization, which is a fundamental process of democracy (O’Dwyer, 2004; Bendell, 2006).

If the NGO as an organization represents the community in the social system, it should be accountable to the public, especially to the people who are empowered by its programs. Theoretically NGO must be accountable to the entire community (stakeholders) that are involved and affected by its activities, they have rights to ask for organizational responsibilities (Hill et al., 2001; Bailey et al., 2000; Buhr, 2002; Unerman and O'Dwyer, 2006; Unerman and Benett, 2004

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Different from NGO, in a profit organization (company) the accountability is formally easy to implement. Organization accountability to the community, if there is any, is made only when the donors require it. Therefore, NGO is often considered "handmaiden of capital charge" (Kaldor, 2003). This causes difficulty in measuring the accountability of NGO (Goddard and Assad, 2006), because as we know NGOs have different objectives from profit organizations, so monetary measurement is not the main thing. Trust and emotion become important to consider (Parker and Gould, 2000; Gray et al., 2006)

Nevertheless, in general some authors state that there are some accountability measurement mechanisms; e.g. Gray et al. (2006) states that accountability can be measured through , an explanation with respect to the form of organization, activities of organization, funding of organization, and whether the funds are used as intended, while Kovach et al. (2003) states that organizational accountability measurement involves two key dimensions, namely control of the members and access to information.

Members can demand organizations to conduct better organization management. Access to information includes announcement of the company’s activities to internal and external stakeholders as a form of organization transparency. These two dimensions are the forms of stakeholder supervision of the company. Ebrahim (2003), however, states that there are five accountability mechanisms used by NGOs; 'Reports and disclosure statement; performance assessment and evaluation; participation; self-regulation; and social ".

Reports and disclosure statement. As part of the mandatory reports, the donors want regular reports about the accountability of funds. The nature and form of these reports can vary depending on the specific information the donors want and the nature of the funded project. For example, Southern Governance requested annual report and quarterly detail funded projects report (such as the number of irrigation systems built, the how many hectares of land, and the number of villages empowered) to calculate the cost spent on each project. Report and disclosure are external accountability tools but they have limitations in terms organization's internal ethical behavior.

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Performance assessment and evaluation: The donors evaluate the organization to determine the objectives that have been achieved and decide the next budget. Evaluation is also used to measure how the progress of staff is in accordance with the objectives and mission of the program. The reason why the donors do this evaluation is because they want to help the staff become better by exposing the flaws and weaknesses of the plan of the project or development strategy.

Participation: It refers to information about project plans that are made for the sake of public including public meetings, surveys, or formal dialogues about the project. Participation usually involves consultation with community leaders and members so that the decision depends on the project plan. The community also conducts negotiation, with their bargaining power, so that they have control over resources and are involved in assessment of the executed projects.

Self regulation: Self-regulation is an effort of NGO to develop standards of behavior and performance and consequently restore the image of NGO after public scandals. Intervention or criticism from outside helps to solve the problems of the integrity of the organization. The process of developing is done through building the same perception of mission, principles, methods, and values that are to be achieved. Although the contents of the code of conduct can vary, they generally include an agreement on the principles and ethics of development and function as guidance for NGOs.

Social audit: It refers to the process of organizational assessment, reporting, social performance improvement and ethical behavior. This process is carried out mainly through dialogues with stakeholders. Social audit is a complex process that integrates various elements of accountability mechanisms including the disclosure statement, evaluation, participation, and standard ethics of behavior. As a mechanism of accountability, social audit can provide the community and donors some insights into developing goals and operations, and is an indicator used to assess the performance. This is used as a strategic planning tool for decision-making and as the ways for NGOs to renew public’s perception through transparency. Social audit spends time and cost especially for small organizations. Nevertheless, social audit makes accountability mechanisms worthy.

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Growing distrust of the public of NGOs due to various scandals done by them leads to increasing demands for accountability from the public and the government. This is because NGOs are social institutions whose function is to serve the public, but in reality they are often not accountable especially in terms of the distribution of resources and disbursement (Gibelman dan Gelman, 2001).

Some excuses made by some NGOs are for example, they state that organization is a service provider not a goods provider and therefore, they do not have to be accountable to any one (Eisenberg, 2000) or that organization is responsible only to the donors, not to the public or to another party that is empowered because the funds are coming from the donors, not from the public. This is different from government organizations from which the public, as the principal (giving donations, paying retributions or taxes to the state), have a right to ask for explanations about the distribution of resources. Contrary to this, for the NGO, community is only the beneficiary (not the principal) so they often ignore them.

However, as many parties demand more transparency from organizations, the NGOs are required to be accountable to the public (stakeholders) (Gray et al., 1997; Jacobs, 2000; Eisenberg, 2000; Ebrahim, 2003; Kaldor, 2003). Even though the people do not have formal rights on the accountability, the accountability of the organization to the community is a control mechanism and the donor institutions can use it to measure the performance of organization and at the same time erode public distrust of the organization.

Accounting Perspective: Stakeholder Theory

In agency theory, where conflicts of interest between owners and managers are mentioned (Jensen and Meckling, 1976), it is stated that company is the center of a contract between individuals who participate in the company's operations and describes the company's relationship as a contract between the owner (principal) and the agent. Conflicts of interest between the agent and principal in the agency theory are mostly about the problems in profit organization and do not describe the specifically the positions and claims of other parties (stakeholders) that have no direct relationship with the company.

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The development of the theory of the role of other parties that have no directly related to the company is described in more detail in stakeholder theory that was first proposed by Freeman (1984), who gives an outline of the concept of meaning and elaboration of stakeholders.

The role of agency and stakeholder theories is initiated from entity theory, which is related to determining the rights to profits (prosperity). Entity theory has always been associated with the participation in economic activities, namely; managers, employees, investors, creditors, governments, and other entities involved. They are the parties who benefited from the added values achieved from economic activities (Suwardjono, 2005; pp. 495). This chapter describes the entity theory, agency theory, stakeholder theory, and finally integrates the views of these theories. This chapter describes the entity theory, agency theory, stakeholder theory, and finally integrates the views of these theories. C. Stakeholder Theory

Stakeholder theory is an organization theory that inherently involves moral meaning. The importance of the moral meaning can be seen in the nature of the relationship between the organization and its stakeholders and managers as a central relationship (contract) between the organization and stakeholders. In the narrow definition stakeholder theory is the relationship of stakeholders in managerial perceptions about the strength, resources, and risks faced by the company, while the broad definition involves not only relationship between humans, but also relationship between human and environment. Normatively, stakeholder theory is focused on the legitimacy that involves risks, ownership rights, and moral claims (Mitchell et al., 1997). For example, the stakeholders are held in regard because they influence organization's activities.

Although stakeholder theory is a theory that has a good basic concept, come back again, there are, however, like agency theory, problems between the company and its stakeholders due to opportunistic managers causing this theory to have many interpretations and be criticized by academics and practitioners, though there are also a lot of supports. Some critics to stakeholder theory are among other things stakeholder theory is a tool of opportunist management, stakeholder theory does not provide the function of specific objective of the company, and stakeholder theory considers outputs distribution based on the inputs (Philips, 2003; pp 19-31). Yuesti, Novitasari & Rustiarini 107

Critics to stakeholder theory that state that stakeholder theory is a tool of opportunist management, further argue that maximized wealth of shareholders is the cause of agency problems. Moral hazard that immerges from the risk that must be borne separately does not mean there is no moral-related relationship because the managers will make serious efforts to enrich themselves and charge the owner of the organization. The critics state that stakeholder theory is the immoral managers that prioritize only their interests and when they again dispute over agency problems and shareholders’ welfare, it is a pseudo design. Opportunistic behavior of managers through stakeholders is done through the justification that their actions would provide benefits to the company through maximizing utility of other stakeholder groups (Philips, 2003; pp.20).

The second criticism states that stakeholder theory does not give a specific objective function to the company. It rejects the notion that companies must maximize long-term values of the owner as business objectives and requires employers to be fair to all stakeholders. This criticism is made by for example Jensen and Sternberg that stated "value to maximize welfare is nothing but a strategy to maximize total value companies’ market (the sum of the market value equity, debt) and all possible claims against the company so there is no reason to believe that the management can easily apply stakeholder theory ". Finally, when stakeholder theory is applied for the purpose of the company (organization), which is making profit, it is consistent with the maximization of company’s utility for a long term.

The third criticism states that stakeholder theory considers the distribution of output. The debate on stakeholder theory often focuses on how many groups involved in the organization; how the groups are involved in decision making related to objectives and strategy of organization; how much should be shared with them by the organization; and to whom the portion is given are the things that need to be considered. Stakeholder theory also considers inputs which are given by the stakeholders in the decision making according to the portion given.

One of the most important things in the study on fairness of a procedure is the doer’s agreement in a control process such as fairness in outcome determination. This is substantial matter determined by a fair process in the distribution that will finally involve greater participation in the decision making – this will improve the fairness in outcome distribution.

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One of stakeholder theory’s suggestions is the related stakeholders have to give inputs in the decision making of the organization. This is one of the normative reasons that organization has a moral obligation to its stakeholders but the stakeholders must give inputs to the organization.

Focus on distribution and procedure does not mean the focus is only to output distribution, besides disbursement, information distribution to the stakeholders by the organization is also vital. This distribution also gives a fair role to the stakeholders in order to broaden information distribution to the stakeholders in the process of decision making. Transparency between the organization and the stakeholders gives great contribution to fairness in a process. Stakeholder theory is often only about how financial output distribution is done and does not take non- financial issues, honesty and fairness, into account.

All stakeholders are equally treated even though each party in the organization gives different contribution. Whereas, stakeholder theory’s fairness principal for equality is based on appropriate condition. This interpretation is also proposed by Soloan Colloquy “company must try to distribute profit gained from its operation equally to its stakeholders either in the form of profit, burden, or risk”.

Iii. Research Method

This study uses Husserl’s phenomenological approach. Phenomenology Husserl argues that phenomenology is the study on culture or "soul" of culture based on the foundation that is truly scientific. It can be done by understanding how the soul refers to the life. Therefore, by understanding the meaning intentional phenomenology, it is expected that there is a way to regain the deepest meaning through experience and systematic knowledge about life (Lebenswelt), which makes a total reorientation. According to Husserl, the world's problems are not partial, but they are universal problems in philosophy. Then, it can be seen from the opinion that the problems of the life (Lebenswelt) are the basis of human thinking in developing the science that they create. Husserl also states that every transcendental subject constitutes (creates) its own world according its own perspective, which is unique and distinctive. This world is certainly not the objective world in terms of material world, but it is the world that is regarded by the subjects as a person.

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The study was conducted on a non-profit organization Maha Bhoga Marga (MBM), which focuses on community development, environment and community welfare. Based on the recent data MBM is an organization with a hierarchical structure and a number of field offices that function to coordinate collaboration with local government, field work, scientific research and programs carried out at conservation sites. The head office of MBM (located in Badung, Bali) leads and coordinates with the branch offices to develop policies and priorities, help the branches with learning exchange program between offices, coordinate national campaigns, provide technical assistance and help with capacity building as well as provide other supports in order to make sure its activities at the national level run smoothly. Based on the observation, the researcher decided to conduct the research at the head office of MBM because it has the authority to coordinate branch office policies and support their activities so that more complete information can be gained.

This study used participative observation data collection method (Mulyana, 2003). The researcher observed the people by getting involved in their daily life, seeing what, when, with whom, and under what circumstances they do their daily activities, and asking about them. The presence of the researcher to interact with the subject of the research could hopefully provide more comprehensive understanding about the research results. Interviews with a tape recorder and note-taking, documentation study on the results of interviews with the subjects, and field observation were done to see directly the behavior related to the observed phenomena (Stone, 1979 quoted Sandera, 1982). In-depth interviews and comparing information obtained from informants (organization and community) and analysis of documents were parts of this research to clarify the results.

This study applied existential phenomenology method. Burrel and Morgan (1994 pp.243-247) describes that phenomenolgy considers the understanding about the meaning of human daily life (life world) to reveal social problems, interpreting how people act in daily life. Through this approach the researcher observed directly the everyday life of the subjects using an analysis tool, stakeholder theory, in two phases:

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1. Intentional Analysis. The observation was done with intentional analysis (Husserl calls it consciousness). Intentional analysis is actually a correlation between perceived objects (noema) and subjective understanding (noesis) about objects or experience. 2. Epoche. It is the behavior of researcher in collecting field data field (Husserl calls it bracketing).

IV Results of the Research

A. Observation of Organization (Intentional Analysis)

Accounting community faces the reality that accounting concepts are understood differently. The funds that have been granted to certain parties are, in accounting books, considered liability. To narrow the interest gap between beneficiaries and funders, MBM provides examples that can accommodate both interests. Some policies were made to eliminate the opinion that considers such funds as liability.

In Table 1, some activities related to collateral, systems, formation, model, term, credit ceiling, number of companion and activities are shown. Each activity group has different policies that are adapted to condition of the community and capability of the organization.

Table 1: The Policy of Group Activity

Item KPM KSM KSP PMSU Assurance Not necessary From the volunteers Not necessary Need assurance System A sharing A sharing responsibility 75% of the surplus, and 2 Debt responsibility cows of the three cows born Group Group of 7-10 Group of minimum 7 Group of 5-10 persons Individual persons persons Model Group Group Group Individual Term 10 months 18 months ------24 months Ceiling Rp 10 million Max 2 million /member ------Max Rp.25 million /person Number of 54 KPM, 437 128 KSM, 1.958 persons, 33 KPS, 264 persons, 2.322 person companion 2009 persons 1.371 men, 587 women The capacity of 420 cows (group) Activity Monthly regular Monthly regular activity Collecting the cattle feed Micro-economy activity development

Source: Annual Report MBM, 2015 (Modified) Yuesti, Novitasari & Rustiarini 111

Alternative accounting that is applied by MBM is a form of synchronization with the Financial Accounting Standard, which is based on Regulations made in the Synod of the Protestant Christian Church in Bali (GKPB) and with Financial Accounting Standards applied in donor countries. The Financial Accounting Standard that is used as the main reference in Financial Report is PSAK no. 45 about Financial Report of Non-Profit Organization. Synchronization was done when there were problems that could not be solved through the rules of GKPB and through the format and other financial reporting systems that are used in Donor Countries.

The synchronizations that have been carried out so far are synchronization of standards and synchronization of financial reporting systems. One example is the funds from domestic donors, which were initially used for physical development, are now used entirely for human resource development. Another example is the aid programs from foreign donors, which were initially for economic development under certain conditions, are now the programs without debts repayment and used for the development of human resources, health, social and environment. The following is a summary of alternative accounting which has been applied:

Table 4.2: Shaloom Accounting calls for pseudo-fund abolition

Fund Old New Intern Physical development with repayment Human Resource Program Ekstern Micro-economic development with Human Resource Program, some that need to do debts repayment Social, Health, Environment.

Source: Annual Report MBM, 2009, (modified)

Becoming a noble path for people to reach prosperity is a strong motivation for MBM to serve the people.

‘For the poor will never cease out of the land; therefore I command you, You shall open wide your hands to your brother, to your needy, and to your poor in your land’ (Deuteronomy 15:11)’

The Word of God quoted above is the verse for February 2010 according to the book Praise and Promise of GKPB.

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It is right to cite it in this report because this verse reminds us to introspect about whether or not the service of MBM during 2009 was still on the track (still running in accordance with the vision, mission and objectives). On this occasion we are certainly not in the position to interpret or debate this Word of God, but let us say amen to that. The poors are always around us, and we are required to open our hands to them.

B. Field Data Collection (Ephoce)

1) Data Collection of Organization

Sustainable Green World

The group "Lingkungan Lestari" was formed in early 2008. The purpose is to involve the community in environmental conservation that begins in the family/household. The activities are sorting out household waste into two types, organic and non-organic. Some villagers of Abianbase Village, Badung, Bali are the members of this group. The target was initially 50 households but since many villagers were interested in this activity, this group has now 71 members. Many villagers cannot join in this group because it has limited personnel.

The group "Lingkungan Lestari" is different from the other groups formed in MBM. In terms of the community (members) that is served and the way the service is given, this group is very different from KPS (Group of Cattle Breeders), KPM (Independent Women's Group) and KSM (Self-Help Groups). The group Lingkungan Lestari is more oriented to preserve environment than to gain profit. Its members are from various background – entrepreneurs, civil servants, lecturers, priests, etc.

The the service is given to the community is very simple. The members must seperate organic waste from non-organic waste. After that MBM takes the garbage that has been sorted twice a week for further processing. This pilot program is to make the members aware of the importance of sorting out the garbage, organic and non-organic. However, this program is a difficult thing to do. The garbage that has been transported is still mixed, plastic garbage with leaves garbage. This is still happening now although this group has been in service for two years. Various attempts have been done, but there are still members of the group who are "stubborn". Yuesti, Novitasari & Rustiarini 113

From the discussions in regular group meeting (once in 3 or 4 months), it is known that the heads of household (father/mother), who attend the meetings, have already known how to manage the garbage but there are other family members who do not how to do it, they just throw the garbage without first choosing to which garbage bin, organic or non-organic, they should throw it. This is one of the reasons why the garbage is still mixed. Even in the last group meeting, a father admitted that in his house, it is only he who cares about garbage sorting. The other family members are still throwing the garbage without sorting it out first.

There is an ‘underestimating’ view on this program. There are some members of the group who still think this program usual garbage transporting that has been done for many years – garbage men take the garbage from the houses and then dump it onto landfill. The fact is more than just that. We should educate the members so that they become more aware of the importance of sorting out the garbage. We are also still processing the garbage collected. This is perhaps the cause of the garbage throwing is still not as the group wants. In fact, by sorting out the garbage according to its type, the group members are also involved in more advanced waste management. Actually, not all members of the group are still mixing their garbage. There are the members who have been consistently sorting out the garbage properly for these 2 years. There are only few of the members but from them, we are motivated to keep working for the preservation of the environment.

2) Personal Data Collection

Shaloom accounting, according to researcher, has high solidarity to other aspects. It does not only concern with profit but also with social and environment aspect. According to GRI (2000-2006) there are many components that must be considered in every aspect. One of the examples of solidarity that is implemented by MBM refers to PSAK 45 and synchronization with the regulations and standards applied in other countries, which are as follows:

1. Before 2004, 30% of the profit from each unit is given to the Synod. From 2004 until now, 50% of the profit has been given to the Synod. 2. Assets investment development fund or investment is managed centrally. Every institution and department has to deposit assets management fund.

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In education sector, the Assets Development Fund is based on building cost and for non-educational institutions it is based on agreement. 3. To support social activities which are not included in the unit, 5% of the profit should be given to the Synod. 4. Since supporting other institutions is also important, every institution must support the others when they have difficulties in funding. They can give a short-term loan, a long-term loan, or grants.

The following is the summary of the explanation given above:

Table 4.3: Forms of Accountability

Accounting Activity Before 2004 After 2004 until now Operational balance deposit to head office 30% 50% Church asset development fund deposit Based on Agreement Based on depreciation as the saving for physical fund. For Orphanage None 5% Debt among KPB institutions Non-compulsory Compulsory Report Submission Owner and Donor Owner, Donor, Community (through meeting)

Source: Annual Report MBM 2015, (Modified)

Based on the field observation, MBM has done the accountability to several stakeholders. The first stakeholder is the owner, which is The Synod of GKPB. To the owner, MBM has to bear the responsibility for all operations of the institution. The aim of this is to improve institutional accountability to the owner and other agencies owned by GKPB MBM gives a report to the donors about every program funded by them. They are the reports of activities, progression of the activities, the use of funds and the benefits of the fund. The third accountability is the accountability to the community. The use of all funds is reported in the Synod assembly which is held every two years. The communities here are the people who are funded and also those who are not funded but related to the service of MBM.

3) Abstract Essence and Experience Awareness (Eidetic Reduction)

Accounting that emphasizes Spiritual, People and Environment becomes an important concern in the development of accounting. Yuesti, Novitasari & Rustiarini 115

Various studies have been conducted to support the development of accounting concepts. The theories underlying the development of this concept are the theory of accounting, social and environment. Interpretation of the Word of God in the Bible is also underlying this development. Based on literary reviews and observations on the application of accounting knowledge, it is implied that:

1. Accountability of Social and Environment has been applied in every institution in different ways through a specific program. 2. Accounting Accountability that emphasizes spiritual, human and environment based on research results and the implementation of social and can be applied by doing social costs imposition, allocation of certain costs and certain cost efficiencies to be allocated to social and environmental issues. 3. Based on the observations, the Accountability and the pratices of social and environmental accounting that are applied in MBM are: a. Creating and implementing community development programs either through economics or health sector with specific funding for the programs. b. Creating and implementing environmental programs, which are the program of clean and healthy environment, sustainable green world, and animal waste processing into green energy, with their costs.

4) Accountability from the Perspective of Stakeholder Theory

Stakeholder theory is a theory that is used to reveal information needed by its users based on the interests of the information users (Deegan, 2004: 266). Stakeholder theory explains various interests that can be seen from normative perspective – seeing the interests from ethical or moral perspective. Stakeholder Theory is a theory which addresses the disclosure in the context of fulfilling the needs of information and the models of disclosure required by the users. The use of stakeholder theory is based on the consideration that individuals and groups are parts of an organization that are capable of affecting the achievement of the organization’s goals with specific behaviors.

Individuals and groups will behave differently for different purposes. Normative perspective views that individual and group problems arise when achieving organizational goals (Deegan, 2004: 267).

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Deegan (2004: 267) states that, basically, stakeholder theory has two branches; normative discipline that is related to ethics or morals and positive discipline that is related to managerial sciences. The differences between the two branches are the goals and assumptions used in the study. This causes problems of inconsistency. Doubts on the theory appear along with the emergence of new researches that use the same theory for different purposes and assumptions without giving clear explanations. The problems arise because stakeholder theory is used only to see and fulfill the interests of the shareholders at the expense of the others’ interests. Ethical or moral aspect is treated as if it was not included in the elements of interests.

When viewed through the lens of stakeholder theory, all the interests have been fulfilled. But keep in mind that this theory has a weakness. It cannot see the whole accountability from various perspectives. This theory is only able to perform horizontal accountability. From the results of research that has been done on the object, both horizontal and vertical accountability are necessary. Horizontal accountability is carried out to the community and environment. Accountability to the community is realized by a concern for the needs of the community for reproductive health and for HIV-AIDS. These concerns emerge because of the sense of responsibility of the institution for the community and the nation.

Another horizontal accountability is the concern for the environment. This concern is realized through waste management program, planting organic vegetables, and implementation of Sustainable Green World program. This is to take the responsibility to the conservation of the nature of Bali and Indonesia. The last Accountability is the accountability to God. Everything that was done by Yayasan Maha Bhoga Marga should be accountable to God. Helping others and preserving the environment are the forms of responsibility to God. If accountability to God is not made and communicated, then what has been done so far is only a . Therefore, this foundation is doing a form of accountability to God through worship activities that are done every day.

V. Conclusion

Accountability from the perspective of stakeholder theory is the accountability to all stakeholders. The stakeholders are owners, operators or management, and social. Stakeholder theory does not emphasize vertical relationship with God as the True Owner. Yuesti, Novitasari & Rustiarini 117

Based on the observations, Maha Bhoga Marga Foundation conducted both vertical and horizontal accountability. The emphasis of the vertical accountability has spiritual meaning, the accountability to God. On the other hand, horizontal accountability is the one that has social and environmental meaning. It can be concluded, then, this research results in the development of accountability concepts, vertical and horizontal accountability.

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